Construction Spending up 9.6% Year over Year

Construction activity in October was healthy across the board. Other sectors within construction have been up and down but housing continues its sustained uptrend. Construction spending jumped 1.4 percent in October, following a gain of 0.5 percent the month before. The consensus called for a 0.4 percent gain.

The rise in October was led by private residential spending which advanced 3.0 percent after rising 1.1 percent the prior month. For the latest month, new 1-family outlays jumped 3.6 percent, new multi-family construction jumped 6.2 percent, and residential excluding new homes (largely improvements) gained 1.8 percent.

On a year-ago basis, overall construction was up 9.6 percent in October, compared to 8.9 percent the prior month.

Construction activity in October was healthy across the board. Other sectors within construction have been up and down but housing continues its sustained uptrend. Construction spending jumped 1.4 percent in October, following a gain of 0.5 percent the month before. The consensus called for a 0.4 percent gain.

The rise in October was led by private residential spending which advanced 3.0 percent after rising 1.1 percent the prior month. For the latest month, new 1-family outlays jumped 3.6 percent, new multi-family construction jumped 6.2 percent, and residential excluding new homes (largely improvements) gained 1.8 percent.

On a year-ago basis, overall construction was up 9.6 percent in October, compared to 8.9 percent the prior month.

This is funny. Only because in the other thread where you shared the chart regarding vehcle sales, I had edited my initial response to remove "Next we'll be hearing about new homes being built". Really. I edited the thing because I didn't think in a million years anyone would be so foolish to think that people were so naive to buy the argument without the relevant outliers. Again...the same outliers as in the car sales thread.

I should have just left it. Gosh. Could see it coming from a mile away. In fact, I'm fond of the notion that political science...much like the real stuff...is nothing if not prediction.

Probably should just go ahead and add food spending while we're on the subject. Do you have a chart on standby for that too? May as well just go ahead and get it out of the way.

This is funny. Only because in the other thread where you shared the chart regarding vehcle sales, I had edited my initial response to remove "Next we'll be hearing about new homes being built". Really. I edited the thing because I didn't think in a million years anyone would be so foolish to think that people were so naive to buy the argument without the relevant outliers. Again...the same outliers as in the car sales thread.

I should have just left it. Gosh. Could see it coming from a mile away. In fact, I'm fond of the notion that political science...much like the real stuff...is nothing if not prediction.

Probably should just go ahead and add food spending while we're on the subject. Do you have a chart on standby for that too? May as well just go ahead and get it out of the way.

If you look at the numbers, much of the gains are not in houses but in apartment building construction. But all areas improved. The economy is not booming but it has been making slow gains for a while now and it will still take a long time to get back to "normal" again.

The rise in October was led by private residential spending which advanced 3.0 percent after rising 1.1 percent the prior month. For the latest month, new 1-family outlays jumped 3.6 percent, new multi-family construction jumped 6.2 percent, and residential excluding new homes (largely improvements) gained 1.8 percent.

Due to unemployment, tax increases, health bill , there will not be a" normal " again as far as I can tell. I suspect what you see now, is the stability . Mnfg index down to lowest numbers since July 09 numbers , currently.

Well...quite the inventory to choose from. Over 20 Million Houses Sitting Vacant-Fabian Calvo....Calvo should know because he runs a company called TheNoteHouse.us. It buys and sells $100 million annually in distressed debt and real estate. Calvo says, “Over 20 million houses, on any given night in America, are completely sitting vacant.”

Due to unemployment, tax increases, health bill , there will not be a" normal " again as far as I can tell. I suspect what you see now, is the stability . Mnfg index down to lowest numbers since July 09 numbers , currently.

You would think mentioning the manufacturing index would be relevant as it was released at the same time as the wonderous housing news. But that doesn't fit the op's agenda. Another funny thing is that in all of the posts on housing and booming economy, not one mention is made of the federal reserve.

Well...quite the inventory to choose from. Over 20 Million Houses Sitting Vacant-Fabian Calvo....Calvo should know because he runs a company called TheNoteHouse.us. It buys and sells $100 million annually in distressed debt and real estate. Calvo says, “Over 20 million houses, on any given night in America, are completely sitting vacant.”

Greg runs a great web site over at usawatchdog, btw. Lot's of good stuff.

20 million homes? Really? More than 20% of all homes are vacant?

Anyway, I know of plenty of cheap real estate in India. Why isn't it holding down prices in the US? After answering that question you might discover why abundant real estate in Las Vegas or Detroit has little to do with construction in Atlanta or Seattle.

Anyway, I know of plenty of cheap real estate in India. Why isn't it holding down prices in the US? After answering that question you might discover why abundant real estate in Las Vegas or Detroit has little to do with construction in Atlanta or Seattle.

Well...quite the inventory to choose from. Over 20 Million Houses Sitting Vacant-Fabian Calvo....Calvo should know because he runs a company called TheNoteHouse.us. It buys and sells $100 million annually in distressed debt and real estate. Calvo says, “Over 20 million houses, on any given night in America, are completely sitting vacant.”

Quoting Census Bureau data, Duke said vacant homes for sale had fallen to 1.6 million in the second quarter of 2012, versus a 2 million peak in 2010, but pointed out there were still 2-1/2 times as many vacant homes out there, just not for sale.

Well...quite the inventory to choose from. Over 20 Million Houses Sitting Vacant-Fabian Calvo....Calvo should know because he runs a company called TheNoteHouse.us. It buys and sells $100 million annually in distressed debt and real estate. Calvo says, “Over 20 million houses, on any given night in America, are completely sitting vacant.”

Vacant houses in Seatle (listed by zip code): Three areas are higher than ten percent but the populations listed are less than 10,000- the smallest populations on the list. Of the 33 zipcodes listed, 26 are under six percent vacant. http://zipatlas.com/us/wa/seattle/zi...sing-units.htm

Vacant houses in Seatle (listed by zip code): Three areas are higher than ten percent but the populations listed are less than 10,000- the smallest populations on the list. Of the 33 zipcodes listed, 26 are under six percent vacant. http://zipatlas.com/us/wa/seattle/zi...sing-units.htm

The area I am currently in only has 4-5% vacancy. But, they are chronically vacant. There is a nice 4 bedroom house next door that has been vacant for over 4 years. I saw on my walk, .1 miles away, two 3-4 br houses, newly vacant, but not in the "Somebody just moved out" sort of way, more like in the, "this house has been vacant for a long time". I know this, because I walked around both of them, and the garbage sitting around was quite old.

The house next door is owned by somebody in Kansas, from what I hear. There is never any movement at it, except one day, somebody came around looking for rentals, and I gave them the number of the owner. Two days later, landscapers showed up and cut the grass. That has been the only type of sign the owners are even thinking about the house. There is no for sale sign or anything.

I have alot of contacts down here in Florida along the treasure coast and up in Michigan in metro Detroit, and there just isn't any real signs of an increase in construction or suppliers selling products. The suppliers for roofing are consolidating and are completely dead, they are in a depression and are just not doing well at all. The builders I come across are not building homes, they are doing small tasks for past clients. There is an occassional house built here and there, as well as commercial. The wages they are paying the workers, and the leverage the people have over the builders paying for the home is in their favor of course too. There just isn't much going on right now. Construction is in a depression, it's in a huge state of flux that has been continuing since 08'. I sell and manage a company I'm at, but I feel the industry couldn't get any worse for those doing the actual work. It's sad to see what the actual workers are making and how hard they are working to do the work in comparison to previous times. Wages are bottomed in the industry, everyone else in the chain are trying to squeeze the rest of the money for themselves to continue on.

Alot of people I work for and people I know, have been asking me lately or telling me lately that they have been hearing commercial building is increasing. Now I know why, by these data points being put out. I'm not going to say they are not true, but I think they aren't painting a true picture of what these current data might represent. There is alot of government commercial work that our company was looking at bidding on, etc.. The problem is that the jobs are so strictly regulated including the bidding, our estimators said you need a full time estimating team to actually bid on the work, and those getting these jobs are doing them at cost to essentially keep their employees busy for the time being waiting for more work to come in or may have a strategy that is working, nobody is really sure on this, but the numbers just aren't jiving for people looking that have decades of experience in commercial work.

I've been in the trades business end of things in metro Detroit, good suburbs and now down here on the treasure coast, and can say, the trades are in a depression and nothing is as of yet looking up or pointing towards going in the right direction. There are companies like I said that are keeping busy possibly with these govn't commercial contracts, but they aren't making money. In fact many commercial projects are the same situation. It will take alot to bring the construction trades out of this slump, but it could and at some point will happen. There are just so many regulations and fees, permit expenses, insurance considerations to take into account anymmore that we are dealing with a whole new market today versus just a decade ago, it's hard to see everything just moving forward, unless it becomes like the banking industry, in which you have a handful of companies building everything in the future.

Just giving my 2 cents on what I see on the ground and from looking back to when I got into this many years ago, when it was much more free.

Our economy is suffering because we are in a glut of supply. There is just simply too much stuff around to create a demand for new products. Somehow people get by, and the internet has a lot to do with that. Used goods are being rotated around more efficiently.

The real estate market, however is not being rotated well, because people and banks invested heavily into it at inflated prices, and are sitting on the properties trying to wait out the storm. Inflation will eventually give people the illusion that they are selling their properties at a minor loss or profit.

Importing millions a year in illegal laborers are not helping "the trades". The border states are absolutely hammered. Even if construction were to pick up the amount spent on the average laborer would be WAY down.

More people means lower wages. Importing lower wage earners to undercut the labor market means lower wages and possibly no jobs if you have an overhead to support. You simply can't support your family on the same wages a guy who can't speak English, rides a bicycle and sleeps in the canyon will work for.

If we announced a major pickup in the construction building US citizens would not be going back to work. You would simply see a monster sized wave of illegal immigration with the Border Patrol and Corporations waving them on handing them box lunches and bottled waters.

...and, I live in an area quoted in this article. I've seen Seattle as well.
Seattle has tons of vacant and foreclosed houses on any given block.

Fact is, people cannot afford the rent or buying of houses at their current prices. All the "jobs" that have been created have been in fast food or customer service.

But if you want to believe that everything is coming back, and sunshine is just around the corner, be my guest.

No, it is just that the labor market in the US has changed very rapidly in the last 15 years and the country hasn't been able to adapt effectively. It's all about tech based jobs now, the sales jobs and manufacturing jobs of the 80's that anyone can do are gone and probably won't be coming back for a while.

I looked at houses in the Seattle area when I was interviewing with Microsoft - the CoL there is high more or less because of Microsoft more than anything else. It's all about location. If you can afford to live somewhere now considered undesirable because they're sort of in the country, or in an area where a military base shut down, etc - you can get a killer deal on a house in various places all over the country.

No, it is just that the labor market in the US has changed very rapidly in the last 15 years and the country hasn't been able to adapt effectively. It's all about tech based jobs now, the sales jobs and manufacturing jobs of the 80's that anyone can do are gone and probably won't be coming back for a while.

I looked at houses in the Seattle area when I was interviewing with Microsoft - the CoL there is high more or less because of Microsoft more than anything else. It's all about location. If you can afford to live somewhere now considered undesirable because they're sort of in the country, or in an area where a military base shut down, etc - you can get a killer deal on a house in various places all over the country.

Exactly.

If people could live anywhere, then shadow inventory would have a devastating impact on national real estate. In markets with the most foreclosed homes, shadow inventory is a big deal. Everywhere else, there isn't enough real estate at the current price.

If you can afford to live somewhere now considered undesirable because they're sort of in the country, or in an area where a military base shut down, etc - you can get a killer deal on a house in various places all over the country.

Yeah, Detroit has houses for $5,000. But if you don't have a place to work within commuting distance, it's pretty useless to buy a house there.

Yeah, Detroit has houses for $5,000. But if you don't have a place to work within commuting distance, it's pretty useless to buy a house there.

Yeah, it wouldn't be a feasible option unless you were retired. But for someone retired with a steady income, the deal wouldn't be better. There are areas like that all over the country, where the landscape has so drastically changed economically for the worse that people of working age can no longer afford to live there.

Home building isn't happening in those kinds of areas. Young people are moving out of those kinds of areas, and gravitating towards areas booming economically. The areas booming in this economy are seeing the serious home building to handle the movement. Hell, look at Texas for a prime example of this.